What you need to know about the health care tax credit!

I like writing, but dislike the concept of blogging. It seems too self-centered—like everyone in the world is interested in my viewpoint. But it seems like the best possible way to distribute information to Tompkins Chamber members and people in this community about the Patient Protection and Affordable Care Act (PPACA—the Health Care Act).

So, first, here’s information about the health care tax credit for small employers. From 2010 through 2013 there is a tax credit for qualified small employers, who purchase health insurance for their employees. You are qualified if you employ no more than 25 full-time equivalent (FTE) employees during the tax year AND pay average FTE annual wages of no more than $50,000 AND have a health insurance plan for which the employer pays at least 50% of the premiums of those enrolled.

For 2010 the credit is 35% for for-profit and 25% for tax-exempt employers of the lesser of the amount the employer spent to purchase health insurance OR an amount to be named later. Seriously! The Secretary of Health and Human Services will benchmark an amount and this will be made public by the IRS at some point later this year.

But I’m not finished yet. The full amount of the tax credit only applies to employers with 10 or fewer FTE employees who average annual FTE wages of less than $25,000. There are also provisions for 2014 and later for employers who purchase their insurance through an insurance exchange (more about these in a future blog).

This is a wonderful tax credit. It could mean a good savings for small businesses and, if employers understand the provisions, it could spur increased employment. But, it also means that you better have a good accountant. I’m still not sure how the credit will work for not-for-profit businesses, like the Chamber, since we don’t generally pay income taxes. I’m told that there will be either a credit on another tax or a refund.

More later. There will clearly be more to blog about. The bill, PPACA, is about 2,000 pages long.

As always, don’t rely on this for tax advice. See a qualified accountant.

JULY 2010 MEMBERS IN THE NEWS

Tompkins Financial Corporation,a $3.2 billion financial services holding company based in Ithaca, has been named to the American Bankers Association’s list of top performing banks for 2009. In an article published in the May 2010 edition of ABA Banking Journal, Tompkins Financial Corporation ranks 10th out of 148 U.S. public banks, thrifts and holding companies with assets over $3 billion as of December 31, 2009.
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Ithaca Health Alliance Names First Executive Director Ending a two-month search for leadership in its next phase of development, the Ithaca Health Alliance has selected Bethany Schroeder as the first Executive Director in the organization's history. Schroeder, who has served for the last four years as President of the IHA Board of Directors, is expected to oversee the coming expansion of the IHA's Ithaca Free Clinic into larger quarters and to address the increasingly complex administrative and funding needs of the Alliance.